DrumBeat: July 21, 2009

It's being driven by two or three outlooks on behalf of the Chinese. The first, and most obvious, is energy security. On a comparative basis, relative to the size of their economy, they are not blessed with that many natural resources themselves, so they want to get access themselves to the physical barrels, if possible.

The second thing, which drives the importance to the Chinese, is their own view that the industry is running short of natural resources and so it would be a good long-term investment, in and of itself.

The third thing that is really driving the importance of the Chinese market is the fact that that they've got the money. They can finance these deals and, particularly in today's marketplace where raising capital is more difficult than it was a year ago, this ends up being a critical factor in deciding if you're a seller that we want to do business with.

QUITO (Reuters) - The Ecuadorean oil minister on Tuesday accused French oil company Perenco of breaking the law by planning to halt production and said the government will analyze the legal status of the firm in the country.

State-run oil firm Petroecuador seized control of Perenco's two oil blocks in the OPEC-member country last week, after the company decided to halt operations over a tax dispute with the government.

ABUJA (Reuters) - Royal Dutch Shell (RDSa.L) said on Tuesday it has resumed oil output at its EA oilfield in Nigeria, a rare bright spot for an industry battered by a string of militant attacks in the last two months.

A Shell spokesman said offshore production resumed at its 115,000 barrel per day oilfield after being idle for three years because of security concerns.

For those who don't spend their lives in the stock market, talking one's book refers to money managers, who after buying stocks, give interviews where they talk up the merits of these investments in hopes other investors will follow them and bid up the share prices bolstering the managers' performance. OPEC last week issued its July monthly oil report and predicted that after two years of global oil demand declines, consumption would be higher in 2010.

Energy Secretary Steven Chu likes cooking, biking, crossword puzzles and is a big fan of “Casablanca,” and his “friends” talk about recycling used batteries from electric cars.

These are among the insights from the energy secretary’s Facebook page, launched Tuesday. In just a few hours, Chu collected 730 “fans.” His Facebook debut, along with personal pages on “YouTube” and “Flikr,” are part of an effort to promote the Obama administration’s climate and energy legislation.

Critics of the British Government's energy and emissions plan point to its goal of turning the most expensive and least consistent fuel sources -- wind and solar -- into base load electricity sources for the country. The result, according to the critics, is that power costs will climb sharply and reliability will be at risk. In their view, the British Government is turning electricity economics on its head to the detriment of consumers.

Bats use sonar to navigate and hunt. Many have been killed by wind turbines, however, which their sonar doesn't seem to recognize as a danger. Surprisingly, radar signals could help keep bats away from wind turbines, scientists have now discovered.

Congress appears close to restoring the $100 million in funding for hydrogen research that Steven Chu, the energy secretary, had cut from his budget in May.

The House of Representatives voted 320-97 last Friday to approve $26.9 billion for the Department of Energy, including $153 million for hydrogen and fuel cells in the Energy Efficiency and Renewable Energy program, plus $40.45 million for hydrogen from coal.

The Senate Appropriations Committee was even more bullish on hydrogen, approving $190 million for the program. Reconciliation of the two budget figures (assuming the full Senate leaves the $190 million intact) could result in a final amount greater than the $168 million for fuel cells in the 2009 Energy Department budget.

LIVERMORE, Calif. - Americans used more solar, nuclear, biomass and wind energy in 2008 than they did in 2007, according to the most recent energy flow charts released by the Lawrence Livermore National Laboratory. The nation used less coal and petroleum during the same time frame and only slightly increased its natural gas consumption. Geothermal energy use remained the same.

The estimated U.S. energy use in 2008 equaled 99.2 quadrillion BTUs ("quads"), down from 101.5 quadrillion BTUs in 2007. (A BTU or British Thermal Unit is a unit of measurement for energy, and is equivalent to about 1.055 kilojoules).

Aside from its environmental benefits, solar energy is frequently touted for its job creation potential. But for solar manufacturers themselves, machines — not employees — may be the key to their long-term survival.

Because Nissan has said that production of electric car batteries will begin at its Sunderland plant, with the creation of 350 jobs. Some £200m will be invested over the next five years. Through the Regional Development Agency, millions more of taxpayers' money will be spent on all manner of green infrastructure projects to boost the North East as a "low-carbon economic area", including electricity charging points, a test track, an R&D facility linked to local universities, and a training centre for electric cars. It looks as if the British motor industry is just refusing to lie down and die.

KHARTOUM (Reuters) - The head of the United Nations in Sudan on Monday said he was "reassured" south Sudan's army had taken steps to remove soldiers from a contested oil area in the countdown to a divisive ruling on the territory's borders.

U.N. special representative Ashraf Qazi over the weekend accused southern soldiers of straying into Abyei, a central oil- producing region claimed by both north and south Sudan.

Hacking the planet to rein in humanity's effect on the climate has been given a scientific stamp of approval.

The umbrella body for meteorological scientists in the US is about to endorse research into geoengineering as part of a three-pronged approach to coping with climate change, alongside national policies to reduce emissions.

New Scientist has seen the final draft of the American Meteorological Society's carefully worded position paper on geoengineering. The AMS is the first major scientific body to officially endorse research into geoengineering.

NEW YORK/HOUSTON (Reuters) - The recession-battered U.S. oil refining industry may be forced to eliminate more jobs and further curtail capacity in the face of limp demand, tighter U.S. environmental regulations and stricter fuel-efficiency requirements for automobiles.

In the coming months, more refiners may be forced to shut additional units and slash employee numbers due to dismal demand for petroleum fuels.

"You're going to see some whole refineries taken down ... we could see (refinery) runs, as a percent of capacity, drop several percentage points into the low 80s, and correspondingly you're going to see some loss of jobs within the sector, unfortunately," said Jim Ritterbusch, president, Ritterbusch & Associates in Galena, Illinois.

The looming capacity cuts for U.S. refiners could be made permanent as the sector faces more stringent environmental regulations, improved fuel efficiency and foreign competition.

(Bloomberg) -- Natural gas futures were little changed in New York as the National Weather Service said wind patterns were keeping tropical storms from forming near the Gulf of Mexico that would threaten offshore production platforms.

A storm over the eastern Caribbean Sea and another near the Bahamas show few signs of organizing, the Weather Service said. The Gulf region accounts for about 14 percent of U.S. gas output, according to the U.S. Minerals Management Service.

(Bloomberg) -- Crude oil may extend gains above $65 a barrel as an indicator of technical momentum suggests the market has rebounded after failing to break support levels last week, according to National Australia Bank Ltd.

The Moving Average Convergence-Divergence oscillator on the weekly continuation chart is “a whisker away” from turning positive, said Gordon Manning, a Sydney-based technical analyst. Technical buyers usually step in when the MACD rises above its signal line, a so-called bullish crossover.

The US government should be ready to engage local and state governments overseas in addition to national officials as it tries to secure foreign oil and gas supplies, a US senate committee was told on July 16.

(Bloomberg) -- Indian officials said a legal battle between the billionaire Ambani brothers over the supply of natural gas involves “national property” and vowed to ensure the resource is used in accordance with government policy.

The fuel “doesn’t belong to them, but to the people of India,” Oil Minister Murli Deora said by telephone today from New Delhi, a day after the Supreme Court adjourned hearings in the lawsuit to Sept. 1. Oil Secretary R.S. Pandey, the top bureaucrat in the ministry, said yesterday “the government will protect its property at all costs.”

(Bloomberg) -- The power struggle in Iran sparked by the disputed re-election of President Mahmoud Ahmadinejad is weakening the country’s ability to back Islamist groups Hamas and Hezbollah, as well as Iraqi militants.

With the international price of oil fluctuating wildly and its own forest resources under pressure, Nepal desperately needs a new, coherent energy strategy, encompassing imports as well as domestic production.

The world economy has not grappled with this much uncertainty since World War II. Not even the 1973 OPEC embargo comes close. Easily accessible oil riches by the hundreds of billions of barrels were still in the Earth’s crust instead of contributing to environmental problems in major and astoundingly varied ways. The dollar’s reign as the global currency was still firm despite abandonment of its exchangeability for gold and other reserve assets after August 1971. The accumulation of unmanageable levels of dollar-denominated debts -- the inevitable concomitant of relying on a single nation’s fiat money as the main source of international liquidity -- was already born, but the little monster had not yet escaped from the nursery.

Oil and the international monetary order are the proto-variables of the chaotic transition that now besets the world. How long this marcohistoric episode will last and how it will play out is impossible to predict. Nonetheless, independent analytical examinations of the emerging conflict -- intemperate efforts to increase material welfare on a full-up planet -- are beginning to transmute the vague image of the optimal solution. The ideal outcome is a two-level economy or, in ideological terms, Ecological Capitalism.

We so often hear that the world is running out of water. People are dying from lack of water. Rivers are dewatered from lack of water. Because of this we need to take shorter showers. See the disconnect? Because I take showers, I’m responsible for drawing down aquifers? Well, no. More than 90 percent of the water used by humans is used by agriculture and industry. The remaining 10 percent is split between municipalities and actual living breathing individual humans. Collectively, municipal golf courses use as much water as municipal human beings. People (both human people and fish people) aren’t dying because the world is running out of water. They’re dying because the water is being stolen.

Or let’s talk energy. Kirkpatrick Sale summarized it well: “For the past 15 years the story has been the same every year: individual consumption—residential, by private car, and so on—is never more than about a quarter of all consumption; the vast majority is commercial, industrial, corporate, by agribusiness and government [he forgot military]. So, even if we all took up cycling and wood stoves it would have a negligible impact on energy use, global warming and atmospheric pollution.”

Jonathan Faull - Tell us a little bit about why you are in the Maldives.

Bill McKibben - We are working all over the world – 350.org – for a huge global day of action. There is maybe no place more important, to me, than the Maldives, for bearing witness to climate change and trying to rouse the rest of the world.

This is an ancient society that goes back thousands of years. It has built a peaceful, now democratic, and extremely resource-conscious way of life.

People haven’t done the things that people have done in many other places out of greed or carelessness or whatever else. And yet, through no fault of its own, there is a perfectly reasonable chance that well before this century is out, this place won’t exist anymore.

We now think that unless we act very quickly its quite possible that sea levels will rise 2m around the world.

So 2 degrees Celsius is probably not a very “safe” target, and we’re probably going to blow right by it anyways. But not definitely. The only certainty is that keeping the planet from reaching a true “danger zone” will require an effort comparable to America’s mobilization for World War II. But conducted internationally, and lasting for decades. Heading into the big Copenhagen climate talks in December, we need to demand this of our leaders—an international effort commensurate with science’s demands. Because, as Bill McKibben recently wrote, “politicians can bend; physics can’t.”

PUT a group of oil experts under one roof for a while and their discussion is likely to drift to the subject of peak oil — a point in time when maximum oil production is reached, after which it goes into permanent decline.

The advent of peak oil has long been brushed aside by some because it seems like a far-fetched, if not a ridiculous, idea concocted by alarmists. This is despite deafening cries that it is a real and serious threat.

Even among those who agree that it will happen, views differ sharply on the date . Some, like author David Strahan, say it could be as soon as 2017.

Recent data show that the debate can no longer be dismissed as a figment of the imagination among peak oil “enthusiasts”.

A supply glut caused by the global recession and new liquefied natural gas supplies drove down British prices to U.S. levels, Goldman Sachs said in a note to investors dated yesterday. August gas futures for delivery at the Henry Hub, Louisiana, last traded at $3.638 a million Btu on the New York Mercantile Exchange.

U.K. prices “are now at target levels and we believe further downside is unlikely as current U.S./U.K. natural gas prices provide incentive for excess LNG cargoes to flow to the United States,” the Goldman note said.

(Bloomberg) -- Nigerian President Umaru Yar’Adua called on rebels in the oil-rich Niger River delta to work with the government to resolve the region’s problems.

“We are ready to work with you to move the Niger Delta region forward in the interest of its long-suffering people,” Yar’Adua said at a reception in Yenagoa, 150 kilometers (93 miles) west of the oil-industry hub of Port Harcourt, yesterday.

Armed attacks targeting oil infrastructure in the delta, home to Nigeria’s oil industry, have shut plants operated by Royal Dutch Shell Plc, Chevron Corp. and Eni SpA, curbing production of the light, sweet variety of oil favored by U.S. refiners. Nigeria vies with Angola as Africa’s biggest oil producer and is the fifth-biggest source of U.S. oil imports.

KIEV (Reuters) - Ukraine would like the United States to help finance the modernisation of its gas transit network, Ukrainian President Viktor Yushchenko said on Tuesday during U.S. Vice President Joe Biden's visit to Kiev.

CALGARY–Oil pipeline and natural gas operator Enbridge Inc. and its Enbridge Energy Partners affiliate have struck a joint funding agreement under which Enbridge will finance two-thirds of the $1.2 billion (U.S.) segment of the Alberta Clipper crude oil pipeline project.

Under terms of the agreement announced yesterday, Enbridge will take part in the debt financing Enbridge Energy raises for the project. The Canadian company also will fund two-thirds of the project's equity requirements directly into Enbridge Energy Limited Partnership, the unit building the U.S. portion of the pipeline.

(Bloomberg) -- China Petroleum & Chemical Corp., the nation’s largest oil refiner, posted a smaller decrease in fuel sales in the second quarter compared with the first three months, after an economic recovery boosted demand.

Domestic oil-products sales fell 4.6 percent to 31.3 million metric tons, or 2.44 million barrels a day, in the second quarter, according to calculations based on first-half data released by the Beijing-based company today. First-quarter sales slumped 12 percent to 26.4 million tons, Sinopec, as China Petroleum is known, said in April.

(Bloomberg) -- Weatherford International Ltd., the world’s biggest provider of artificial-lift services that boost oil flow in wells, has cut more than 3,000 jobs and plans more reductions as customers keep pressing for lower rates.

The company also has closed more than 20 facilities as it adjusts to a demand slowdown spurred by last year’s collapse in oil and natural-gas prices, Weatherford Chief Financial Officer Andrew Becnel told investors today on a conference call.

British Gas has been challenged as the country’s cheapest online energy supplier as consumers benefit from a surprise summer price war.

Npower has launched two new online tariffs, which make it the cheapest for “low” and “high” energy users. British Gas remains the cheapest for an “average” user, but it is now only £1 a year cheaper than Npower.

(Bloomberg) -- Electricite de France SA, the owner of London’s power-distribution network, said vandalism may have caused a fire and damage to high-voltage electricity cables that cut supplies in Orpington, Dartford and Bexleyheath.

“The fire occurred on a cable bridge which carries the cables across a waterway and there appears to be evidence of vandalism,” the U.K. unit of EDF said in a statement on its Web site. “Locks have been broken on the security gate at both ends of the bridge.” Police are investigating, it said.

At a time when almost every carmaker in the world is looking at making environmentally friendly vehicles, a little-known Indian company is jumping the queue by ramping up production of a low-cost electric car called the Reva.

Orange County continues to grow in population and in water demand, but a crucial supply of Southern California drinking water — the Colorado River — could have a 50% chance of collapsing by 2057, a new study says.

Many people might have thought the worst scorecard was by George W. Bush, who gave up plans to implement the 1997 Kyoto Protocol for cutting greenhouse gas emissions, signed by the Clinton administration but never submitted to a hostile Senate for ratification.

But emissions rose by more than twice as much in the Clinton years, when climate campaigner Al Gore was vice president, as during the combined years when two Bush presidents, father and son, were in the White House since 1990.

So is that legacy a problem for President Barack Obama, a Democrat like Clinton?

As temperatures rise, organisms get smaller, from the scale of whole communities down to the individual.

This relationship was known to exist in nature, with warmer environments tending to be dominated by smaller-sized species, said study leader Martin Daufresne of Cemagref Aix-en-Provence (a French governmental research institute). But what Daufresne and his colleagues aimed to do with their study was "was to test if this known relationship in ecology was working for climate change," he said.

Though Clinton assured her Indian counterparts that the U.S. "does not, and will not, do anything that would limit India's economic progress," the uneasy exchange illustrated a troubling reality: with less than five months to go before the crucial U.N. climate-change summit in Copenhagen, there remains a deep chasm between developed and developing nations on the issue of CO2. Unless that gap is narrowed — and the world can find a way to fairly reduce emissions from rich countries while making developing nations pay their fair share — years of global climate-change negotiations could finally collapse.

The Intergovernmental Panel on Climate Change (IPCC), the UN body of scientists drawn from around the world, will use its next assessment due in 2014 to look at how the impact of global warming is falling unequally on the poorest developing countries.

The Ministry of Finance said the government will subsidise 50 percent of investment for solar power projects as well as relevant power transmission and distribution systems that connect to grid networks.

(...)

Grid companies are required to buy all surplus electricity output from solar power projects that generate primarily for the developers' own needs, at similar rates to benchmark on-grid tariffs set for coal-fired power generators.

So apparently the Chinese way to subsidize photovoltaics is quite different from the "German" kind of feed-in tariffs. It seems to be a mixture of subsidy at construction and feed-in (since grid companies are obliged to buy the electricity).

Does anybody know if this is the general Chinese policy on support for solar?

Any thoughts as to which policy might be better (feed-in tariffs vs. construction subsidies)?

IMO, FIT's or production based incentives are the ONLY way to go, You can get a loan with a power contract, Power meters don't lie, Infrastructure for trade, billing already exists. If we want RE deployed without Enrons like outcomes, turn people and businesses loose on the
problem, Credits are just fooling around with taxpayer's monies. A National FIT is needed, Summary of FITs here:

Last year’s study by professional services group Ernst & Young showed that in the period between 2003-07, oil production in the US remained flat at about 1,2-million barrels a day.

This is obviously a misprint. I think that the original article stated this was the case for US GOM production and the figure was 1.2 mb/d.

But not everyone is convinced about peak oil. BP chief economist Christof Rühl says the argument for peak oil is baseless. “Peak oil has been predicted for 150 years. It has never happened, and will stay this way,” Rühl has reportedly said. He says oil is about price and not about availability.

Statements like this really piss me off. Of course you can find people, in the past, who predicted the demise of oil. If you examine history close enough you can find people who predicted just about everything. A wrong prediction in the past, especially when the creditability of the predictor is not considered, means absolutely nothing. Using that as a stone to throw at those who say that peak oil is soon or here already is using flawed logic.

Let's assume that you are sitting in a commercial airliner, about to take off on a New York to London flight, and you get three different evaluations of fuel on board, from the pilot, co-pilot and from a relief pilot.

The pilot says that he calculates that we have plenty of fuel for not only London, but a grand tour flying over European capitals, returning to London at our leisure--with plenty of fuel on board for a non-stop round the world trip if we wanted to try it. The co-pilot says that he estimates that we have enough fuel to get to London and for a controlled descent for landing. The relief pilot says that he calculates that the plane will run out of fuel about half way across the Atlantic, and he wants off the airplane.

The three pilots respectively represent the conventional wisdom view of virtually infinite fossil fuel resources, the Peak Oil view and the Export Land Model.

Nonsense. Jet fuel is actually continually generated deep inside the fuel tanks. You can fly forever without refilling, it's just that no one ever knew this before and so they keep filling the tanks at airports.

Peak oil is about the end of growth for a certain entity. Things stop growing all the time. I think whenever anyone raises this point you must turn the philosophy on its head. Does this person assume their children will continue to grow forever? Their tomato plants? How do they justify the idea of a physical entity continuing to grow larger forever? Make them try to state examples, and see what they come up with.

It is a principal of probability that any thing that can happen will happen if given enough time. This is the idea behind Taleb's Black Swan events. Probability is a coin with two sides. One can look an event as highly unlikely if the probability of it happening is low. On the other hand, if the probability exists that it can happen, it will happen eventually.

It happened to me. After I was diagnosed diabetic I was told I should lose weight, and being the good little boy I am, I took it seriously. So seriously that I drank aspartame soft drinks to make it easier. And I lost about 40 pounds.

Within about a year I had sharp pain on my right side. I went to the doctor and they did an abdominal scan. I had a kidney tumor about the size of a quarter. I looked it up on the internet and found that the chances of kidney cancer were about 1 in 16,000 so when I went to see the urologist/surgeon I thought it might not be true.

For me it was the opposite. Kidney cancer and removal first. Then onset of diabetes.

But hell, everybody dies of something. If it's not the big C, then the big H. And if not that, then the slow D (death by small diabetes cuts). One way or another, the Grim Reaper gets us all. And that inevitable event is not a Black Swan. Well ... except that ... you see ... in my unique case ... I am exceptional ... I am special ... So it ain't going to happen to me. There there now. My cerebral cortex feels better about these things. The exceptionalism story is a good story. And therefore it must be true. ;-)

_______
"Within about a year, I had sharp pain ..." That's a nice cause and effect story but highly unlikely. Renal cancer grows very slowly and starts off as a very small blip on the Xray. You probably had that tumor for many years and didn't know it.

And it was huge. My friend the head surgical nurse was attending and told me that it was the largest tumor to come out she had ever seen in 8 years of surgery nurse.

It was not painful but my life was slowly draining away. My skin was like 100 years old in texture and color. I could do very little as my energy had gone slowly over time.

But here is the issue. Way back about 7 years prior to this. One night as I was tossing and turning in bed I felt a sharp pain in my left abdomen. Down sorta low. I tried to probe it with my hand. I tried very hard to locate this point. I was not fully conscious but my mind was very clear at this point when I was given this particuliar thought......"This is a beginning of cancer..and if you can find and stop this pain you might not get this cancer." I never forgot that night's experience. It never left my memory.

I continued with my life and it was very merry hell due to a couple months later receiving a notice of divorce proceedings in my mailbox.

My life turned into a living outright hell. Lost most everything I had worked my entire life for.

I am now 70. I had always had yearly checkups but never been hospitalized. Never. An no medications, never.

Yet one day after a checkup I was called and told by a nurse to go to a Cancer Group in the city. This was shocking. I was told nothing else.

My blood they said was way way off the scale. Hemoglobin and hematocrit. An oncologist said I was diagnosed with 'polysythemia'(sp). And perhaps 'vera'. Meaning true.

I asked for the prognosis. She said' no cure and this will kill you if not resolved soon',,,,,,My very life passed rapidly before my eyes. I was stunned. I almost went stark raving mad.

For almost two months they drained away my life's blood each week. It was so thick it would not hardly flow. She once pulled the hollow needle and showed me the clots hanging off it. She had to manually strip the tubing to maintain the flow.

I was a wreck and praying and seeking GOD for day after day after day. I made my funeral arrangements. I finally accepted my death was coming near.

But suddenly the Oncologist started to actually THINK. She ordered a CAT scan,Xrays and a bone scan.

Next day early I was called and told to come immediately!!! More bad news. I had a huge cancer growth on my kidney . This came to be the exact spot where I had probed long long ago and worried about.

Short story. They removed it. I went thru enormous pain and suffering due to kidney stones in the other kidney. Losing it means I was dead since I now only had one.

But so far I am clean. Tomorrow I return for another full set of scans and tests.

I will be clean or once more back into the dark void.

You live day by day when you are like this. You try to follow Thoreau and 'suck the marrow out of life' each day.

I feel lucky at this minute. But can accept reality if need be. I have accepted my fates and my life is in God's hands.

That is my belief system and I am sticking to it. Not that I have ever lost my 'belief' for I have not. I have believed for many many years. Some things happened in my life that set me on this course of belief. I have had a very very good life.

So when that 'sharp pain' hits you? I would listen to it..but to me the medical profession could have 'listened' to me a long long time ago...but they didn't and will not for they have a belief system far different than mine.

Airdale-sorry for the theatrics, but such is life

PS. Renal cancer is likely the best to have of all cancers, or so I have been told. Tomorrow will tell or the week after as I have to wait that long for the verdict...a week of more hell....

You would think it would be easy to counter this type of argument. Any ideas?

There are many kinds of arguments that sound like sound logic and yet they are totally irrational.

It is wrong to believe that you can be prepared for every kind of irrational argument such as this and that you can be ready to "counter" it on the spot. It is also wrong to believe that it's proponent will recognize and acknowledge your brilliant "counter". (Oh that's a great come back. You got me friend. I concede the point and I have now been instantly changed into one who believes in Peak Oil. --This isn't going to happen.)

“Peak oil has been predicted for 150 years. It has never happened, and will stay this way.”

One of the underlying mechanisms in this so-called "argument" is a subliminal attack on the "predictor". It is not going after the main substance of the statement (Peak Oil *will* happen) but rather at the notion that "predictors" are often wrong.

If you feel frustrated by repetition of this irrational argument, you might develop a line of comebacks that demonstrate that there have been many predictions of first time events that came true. For example, given that yesterday was July 20th, you might say that for centuries people believed man would never touch the moon. Yet Jules Verne predicted it and in 1969 (40 years ago) it finally came true for the first time even though it had never happened before.

A good book on this kind of topic is by Valerie Pierce (entitled Quick Thinking on Your Feet --if memory serves.)

As an added note, Peak Oil *has* come true time and again, at the country by country level although just not yet at the global level, as far as we know, and we can easily be wrong about that last assertion.

He is touting the BP point of view, not a world view - he will never admit that BP has a supply problem or that BP's production has peaked - he will say places like the North Sea have peaked because consumers can't afford the price that BP would need to be profitable at higher flow rates.

He says oil is about price and not about availability - I agree with this, there is still plenty of oil in the world, unfortunately the timing of peak oil has nothing to do with how much oil is available to extract.

Peak oil is however about consumers affording the price of an ever more expensive commodity. BP economists say that BP will invest to profitably produce as much as consumers can afford to buy and any peaking will be caused by a lack of demand - which IMO is actually a good description of the world peaking phenomenon.

BP economists live in their own little bizarre world where real world data counts for little.

Regarding the OC Water story, price water appropriately and water will stop being wasted. One of the huge subsidies for water is in the electricity costs for pumping. Charges are in the mils/kwh. The article doesn't distinguish between north and south OC. South OC gets about 70% from the Colorado River, North OC only 30% because of an aquifer that is recharged with water from inland cities and desalinated effluent. We could get 100% from the aquifer if the pumpers (the cities) had an incentive to conserve. But cities are told how much of their total water they may pump (e.g. 75%) and they pump up to that limit. In short, public officials have a hard time raising water rates and lousy results begging for conservation. So the plea is always "more."

Pricing water incrementally would solve the problem. First couple of acre feet are at low rate, next five acre feet of water at twice the first rate. next five acre feet are at four times the first rate. Low users would still not pay a high price. Recycling of water would be encouraged.

Next option is to just lower the water pressure as supplies decline, then everyone gets less. Maybe this is inevitable as Las Vegas clamors for more water from lower flow of Colorado, OC will be further down the tap and get reduced supplies. People only respond to two things: much higher price or cutoff of supplies (just like with gasoline). You will eventually get one or the other.

I had read sometime ago that one out of every six kWh of electricity consumed in California is used to pump fresh water and sewage.

I don't know where to find the numbers, but I suspect that is a one way computation, i.e. it counts all the energy used pumping, but doesn't use hydro as an offset. California does pump water over hills/mountains, but the energy (with some loses of course) is regained on the backside slope. A significant fraction of the Calif electric supply is listed as hydro -although some is imported from the Pacific Northwest -mostly the Columbia river system.

The movement and treatment of water is an important component in electrical demand. The California Energy Commission (CEC) noted the significance of water related electricity use in California in the 2005 Integrated Energy Policy Report (IEPR):

“California’s water infrastructure uses a tremendous amount of energy to collect, move, and treat water; dispose of wastewater; and power the large pumps that move water throughout the state. California consumers also use energy to heat, cool, and pressurize the water they use in their homes and businesses. Together these water related energy uses annually account for roughly 20 percent of the state’s electricity consumption, one-third of non-power plant natural gas consumption, and about 88 million gallons of diesel fuel consumption.” (CEC, 2005c)

I had read this report a few years ago and my memory was a bit fuzzy -- I had thought it was 16 per cent for water and waste water treatment only, but it appears to be 20 per cent for this, as well as its heating and cooling.

Edit: I meant to include this quote from the report's Abstract:

"Water supply related electrical demands exceed 2,000 MW on summer peak days in California. Agricultural groundwater and surface water pumping represent 60 percent of the total water supply related peak day electrical demand, with water agency demands representing the remaining 40 percent. Over 500 MW of water agency electrical demand is used for providing water/sewer services to residential water customers."

The problem is not a lack of water, but a vary sizable excess of people. Reduce the population and the water shortage problem goes away.
They need to accurately determine the carrying capacity of the area at the desired lifestyle and then limit the population to that many people.

My wife's self-estranged aunt passed away alone in Ossining, NY about six weeks or so ago. Alone except for some contact with neighbors, as we have found out, and it was the neighbors who called to police when she did not appear for several days..Yep - dead for those several days alone in the house.

No sure how the Ossining police found my wife (though our local PD) who, along with her brother, are the closest surviving relatives.

As you can imagine just "proving" next of kin has been and continues to be a nightmare and many "officials" suggested just backing away.

Not that we could afford it, but we did pay for her cremation and the ashes will be "split" between her neighbors - who liked the aunt and will spread half the ashes in her garden and my wife's brother who will spread the remaining ashed on his fathers' - the aunt's brother's grave.

Cremation requires a lot of fuel. Bodies should be composted or at least buried directly in forest or grassland topsoil (not in the garden, however, as saprophytes will compete with crops for nutrients, and win out in the short term).

I tried to burn up a dead cow once to save the expense of a backhoe-four hundred bucks.Even though I had a chainsaw and plenty of trees ready to hand,and time on my hands,the next time I will pay the four hundred and gladly,even if I have to take a temp job to get it.

On a more serious note...a sharp axe works better and is not so messy. I have had to bury a number of cows and horses in my day. If you own a backhoe, no problemo, but we could'nt afford when I was on the Farm.

Of course there's a problem with playing "currency games", with the most serious being that a sinking dollar means a sharply-rising oil price, and that's a tax on the consumer. This in turn means less spending and in a few months it shows up in same store sales and other consumer activity.

We can ill-afford this sort of game with the consumer already overburdened with debt and struggling to make ends meet. The last thing we need is $4 gasoline (or worse) once again going into the fall and $4 heating oil should really be welcome in the northeast come winter.

Zero Hedge has also taken note of some odd index correlations of late, but nothing specific to the price of oil.

Morgan Downey has this very interesting new post on When Do We Hit US$1,000 per barrel? He makes a very solid case for prices having a firm ceiling - but also looks into what happens with declining production:

Looking to the future, what if supply declines? How much could oil prices increase? If we hold income (GDP) constant and oil consumption efficiency constant (roughly 4.5 barrels per person globally at the moment) then we get the following chart:

Of course GDP itself would have a severe case of the shakes with declining production, at least until some form of feed-in tariff for the transportation sector could be enacted.

I'm sure he's capable of delving into that as well; most of his postings are macro-scale analysis like this one. Incidentally check out his piece on Oil Demand over Time and Income from the 7th, which is linked in this new post; utterly amazing interactive Flash chart at the bottom. You could employ demand growth as X axis for a producing nation vs. GDP growth, for instance.

What an outstanding way to present graphical information! Here we can see the oscillatory, spiky behavior as the price and the demand yank back and forth on each other.

It's so much better than merely depicting dollar price versus year, since this graph encapsulates the changing affordability of oil as the economy shrinks. Those oscillations will continue, but the deflationary race to the bottom may make them appear to be evolving more in a right-to-left direction over time than in the upward-evolving direction that the $1000-a-barrel crowd would have us believe.

My hat's off to WT; it's good to see someone who's not enslaved to plotting x-vs.-y functions.

I simply modified the price/volume graph that someone else had done for total world oil production. I think that Greyzone described it as "Hitting a wall," and I think that 23.8 mbpd was the final peak combined net export rate for the top five.

I also think that oil prices are best described as a series of doublings, with the caveat that I don't know how to quantify the time periods between the doublings. On an average annual basis, last year we saw between two and three doublings, relative to the average annual price of $14 that we saw in 1998. In 2009, we will probably be back down to around two doublings relative to 1998.

Another way to look at price is as the exponential rate of change relative to an index price ($14 in 1998). As of 2008, the 10 year rate of increase was +19.7%/year, relative to 1998. If we average $56 in 2009, we would have an 11 year rate of increase of +12.6%/year. It's interesting to compare the rate of change in oil prices to the stock price of companies like GM and Citigroup. GM stock has fallen at a rate of over -40%/year, measured from early 1999 to early 2009.

Now I'm going to have to backtrack on some of that glowing praise I heaped upon you. The point is that dollars are not a stable unit of measure of oil's true price. The big runup you describe came about during a period of unprecedented growth in the money supply, which resulted in all kinds of asset inflation. Now the money (i.e. credit) supply is crashing, so the price of oil may never rise to some huge dollar figure, even as it becomes less and less affordable to the general population.

See memmel's post below: describing the cost of energy as a percentage of GDP is IMO a more useful way to capture the "price of oil" than mere dollars per barrel. If you're an investor dollars may be the only important unit to you, but they are not a predictable proxy for affordability, so I couldn't automatically conclude that the dollar price of a barrel will rise inexorably.

The price/export graph starts in 1992, and I think that the top five hit their collective final peak 13 years later, in 2005. The 2006-2008 data points fell between Sam's middle case and high case for top five exports. 13 years from 2005, and 10 years from 2008, in 2018, Sam's middle case is that the top five will be (net) exporting about 10 mbpd (down about 60% from their peak) and his high case is 15 mbpd (down about 40% from their peak), which is below what they were (net) exporting in 1992.

So then the question is what happens to the price of oil over the next 10 years if the export trend line does more or less continue reversing course and heads back to the left?

Stoneleigh: When oil was over $140/barrel we predicted the price would plummet, and it did. In March when the market began its sucker rally, which we warned our readers was about to happen, we said that the price of oil would rebound with the general return of liquidity, before falling further once the rally was over. We stand by this prediction today, as the combination of the destruction of economic activity, the lack of purchasing power and the need for oil-producing nations to pump flat out in order to bring in as much revenue as possible will further undermine oil prices. However, as we have pointed out in our energy primer (Energy, Finance and Hegemonic Power ), demand destruction will sow the seeds of supply destruction.

We expect oil, and gold, to bottom early in this depression, and to increase enormously thereafter. A price increasing in nominal terms against a backdrop of credit collapse means that prices will be going through the roof in real terms. Ordinary people will find themselves entirely priced out of the market. Fiat currency, and cash equivalents such as short term bonds, are not a enduring safe haven, but are a safe haven for the time being. During the deflationary deleveraging, the preservation of purchasing power in liquid form is the key. Following deflation, it will be necessary to move into hard goods, which will be available at prices that will look very cheap to those few who retain access to cash.

As I have pointed out several times, from the summer of 1931 to the summer of 1937, the price of oil rose at a rate of 11%/year (in nominal terms), with demand rising throughout the Thirties, after falling in 1930.

As I have pointed out several times, from the summer of 1931 to the summer of 1937, the price of oil rose at a rate of 11%/year (in nominal terms), with demand rising throughout the Thirties, after falling in 1930.

One has to also image it took a lot large precentage of GDP also.

My opinion is the last Great Depression serves as the best indicator of the future with caution.

The first one is a lot more people lived on farms and could readily resort to effectively subsistence agriculture if they owned their farms which a lot did despite the horror stories. And former farmers could readily work as laborers. In any case rising oil consumption and rising prices for oil happened in and economy far better prepared to cut back on oil. I.e if the argument that oil prices can't rise is true then we would have certainly not seen this during the last depression.

Next I suggest if you look at the last depression it was really a recession followed by a depression just we did not use the term recession back then. At first it was a monetary bubble collapse but quickly evolved into what a call a depression which is massive overcapacity and declining to stagnant economic activity. In effect a depression occurs when the ability to produce goods and services is well in excess of demand.

I know of no good argument that suggests that this depression will be all that much different from the last one as energy usage goes there is simply no intrinsic reason for it not to be.

That does not mean that high oil prices won't be the driving force for a depression i.e this time around we will be facing falling oil production. But this is really a end of the oil based civilization in a sense after it enters a traditional recession. So I'd say that we can expect oil consumption to remain robust and rising prices to play a big role in ensuring this recession turns into a depression then its really just a matter of watching and seeing what happens I don't see any reasonable way to make predictions as the combination of excess production capacity coupled with rising oil prices turns the situation even more dire.

Interesting this is exactly the result I'm rejecting as plausible since I don't agree with the underlying BAU economic assumptions.

Time will tell but these sort of projections should fail miserably if we are in a real transition.

It makes far more sense to assume that spending on crude will rise steadily as a precentage of GDP until viable substitution is possible. Once you assume this then these sorts of projections blow up.

So for example assume you start with crude as a precentage of GDP varying from 4-8% then 8-16% then say 16-32% with a forced economic transition off of oil at some point in the 16-32% range of GDP.

In a post peak world simple recessions no longer work to reduce oil dependence so the precentage of GDP going to oil is forced to increase until you see viable substitution. Thus it makes more sense for us to transition into a 8-16% of GDP range for oil.

The most basic fact that supports this alternative view is that no historical increases in prices have resulted in a real sustained move to alternatives to oil that resulted in declining oil demand.

Thus I assert that this sort of argument is exactly incorrect. Not only is it wrong its perfectly wrong.

Presumably the market signal would be impossible to ignore, bucking the historical trend. Stuart's Auto Efficiency wedge, perhaps - but that assumes these new and improved vehicles will find buyers in the first place.

Top down motivation like that nutty notion of keeping ones tires inflated will do a lot. Of course pols will send us careening down all manner of dead ends before embracing any alternative to oil, leaving this up to Mr Market. This could result in all manner of nightmare holocaust situations for the US, mass usage of bicycles, for instance.

I only hope trucking and ag get the special attention they deserve. It's heartening to read about CNG/LNG being implemented in the Port of Long Beach, for instance.

Memmel: Hard to say, but I don't see Downey talking BAU-he is actually predicting a permanent slowdown of the global economy. It is just recovering right now and we are at 80% of his top number-oil prices need to exceed $80 for strong global growth yet he says $80 will blow it up.

The assumption that oil will remain within a certain band of GDP i.e 4-8% or economic contraction results is BAU.

If you look at EROEI or practically any other post peak economic argument the problem is that this will fail to hold. Instead oil will take a ever increasing precentage of GDP.

We will effectively be working to buy oil and food.

As and example of where this sort of relentless increase holds look at food. As people get poorer food costs simply take either more of their budget or more of their time if they are farmers. There is no magic upper bound that forces a contraction in food consumption.

Oil should behave increasingly like food as you have a choice use oil and get a ever more marginal return or revert to a less oil intensive lifestyle with a lower standard of living.

Certainly the overall amount of oil usage shrinks but I don't agree that there is any real upper bound on what we will allocate to oil as a precentage of GDP.

At some point of course either substitution or far more likely war to take the remaining oil resources will happen but thats yet another transition.

All you have to do is look at your typical displaced family with some income what they buy is gasoline and food. And even in the US as you move down the economic ladder gasoline simply takes a larger and large precentage of the persons income. Amplifying this to a macro level again suggests that oil behaves like food.

Obviously if oil really behaves the same as food then their is no upper bound it simply does not exist.

True, but what Downey is saying is that the upper limit, in this case 4%, throws a greater % of the world economy overboard. Yes, the poor spend a greater % on gasoline, but if the upper limit holds a greater % of the population is thrown into this poor category and the boundary remains. Basically, if the global economy enters a permanent recession, the underclass % will permanently increase-this underclass will spend a greater % on oil, yet because their income decreases even faster they will be forced to substitute food for oil.

One other point-looking at Downey's chart, so far the oil expenditure % has been a pretty good proxy for the strength of the global economy (anything under 2% appears to indicate a strong global economy usually). Therefore, if his theory holds, 6% would be a global recession deeper than seen so far and 32% (your upper limit) would represent something out of Kunstler's novel.

First before we enter a Kunstler novel or Mad Max scenario the world Economy can and will go through a traditional recession. Ok we have done that its in the past. Oil prices have fallen from peak etc.

Next however I'm arguing we don't simply have a sort of long L shaped recession with growing oil prices leading to economic contraction resulting in declining prices and more jobless recoveries. Rinse and repeat.

Instead we have contraction in the FIRE economy for the consumer the outcome is housing values drop to zero and credit ceases to exist. In the meantime the real economy progressively makes less profit spending more of the GDP on oil. The contraction of "paper wealth" generation with declining profits from real services and manufacturing result in ever more of the GDP spent for oil. For the individual this effectively is translated into less money spent on housing and more on gasoline.

Certainly its more complex but thats the basic assertion.

Basically what happens is the FIRE economy is completely wiped out resulting in increased cash flow allowing continued purchases of oil and increasing the precentage of oil costs vs GDP. Only after banking is reduced to the level needed by a population living paycheck to paycheck and housing costs reduced effectively to zero do you reach a point that oil can no longer take more of the GDP as its in direct competition with food clothing and shelter. At this point subsistence farming becomes a must.

If you look around I'm simply asserting that we will see housing prices continue to fall debt continue to be defaulted on and the banking sector continue to collapse and oil become ever more expensive.

Only after the credit is removed and effectively the currencies are no longer fiat either because they exploded in hyperinflation or some where converted to stores of wealth probably fixed against oil do we finally reach Mad Max Kunstler like living conditions.

Regardless oil takes progressively more of the GDP all along this path. You simply can't use past GDP metrics since your losing a huge part of the economy but its the part that uses the least amount of oil.

Memmel: You have a good theory-the interesting part is the FIRE economy has a firm control on political power (note the amount guaranteed is now estimated at 24 trillion)-other sectors of the economy cannot simply suck blood from the taxpayer, so if the FIRE economy shrinks as you forecast the worst case scenario will be sped up as this sector will pull everything under in a fight to survive. Personally, I think what is left of the USA industrial sector will go first as the burden of supporting the inefficient FIRE economy is too heavy at this point.

I don't disagree but this suggests interesting times are ahead not cheap oil.

I think the political implications if I'm right are ominous.
As far as the US industrial sector collapsing well who knows at the end of the day the economy simply can't change over night and by this I mean the "stuff" we make to stay alive from food to say batteries.
Sure a lot of its fluff but by no means all of it. And stuff is far more valuable when your living pay check to pay check with no or little credit. Does this mean the end of the US's industrial sector ?
Maybe as its now configured but on has to imagine that people will take advantage of all the defunct factories to start making stuff that people actually use so who knows.

I don't see why we won't see a resurgence in local manufacture esp as oil gets expensive. So I'd rather say the industrial sector probably will change dramatically. And of course as the FIRE economy fights to survive eventually their printing will result in devaluing the dollar as far as imports go and of course wages will fall.

I see change but its no clear cut. And I just don't see any intrinsic reason for oil to be cheap. All of this change will take energy no matter how it actually happens. As long as people can build stuff they need to earn money to buy food they will and this requires oil. Regardless of what our FIRE masters want.

I don't think anyone's really expecting oil to be cheap in real terms. Stoneleigh has been pretty clear on this. She's expecting the price of oil to go down in nominal terms, but people's ability to pay for it will go down even more. The actual price in dollars may be low, but people won't be able to afford even that low price.

I think we're (increasingly) going to see deflation of property values, durable goods, investments, etc., and inflation of food, energy, & health care costs. Wealth deflates while the cost of living inflates. The worst of all possible scenarios for the common people.

Stoneleigh is definitely predicting that some things will deflate more than others.

Price collapses will in no way be limited to financialized assets, although these should suffer greater losses than material goods. Illiquid securities could go to zero for instance, while oil certainly will not, but the price of oil nevertheless has further to go to the downside than we have seen so far as a result of the coming demand destruction. One would not expect price movements to be equal for different goods, services or financialized assets, but one would expect deflation to decrease price support across the board. Other price drivers, in one direction or the other, in combination with the effects of deflation, will determine the net effect on prices for each item.

Her debate with the Mortgage Implode-O-Meter guy is quite interesting, if you're wondering how she can predict deflation in the face of peak oil.

Thank you Leanan. I sometimes read (or scan) AE but missed this debate. I think that I would have agreed with:

Aaron: The general assumption seems to be that we can only be "in" deflation or inflation, but I think it is evident we are in both, depending on whether you look primarily at real costs or financial assets. Again, this is a source of confusion...

had not Stoneleigh clarified the point thusly:

Stoneleigh: The use of the term 'inflation' to describe price movements rather than monetary expansion is a relatively modern convention. It represents the a popularization of the term, but a bastardization of its meaning...

In fact Mish is also predicting that we will slide in and out of recession for a long time.

I've got nothing against debt deflation and I agree it will be a issue. But what I think Stoneleigh and Mish are missing is debt deflation only matters for goods and services purchased with debt. And in general long term debt not short term credit thats much closer to cash. PayDay loans for example are a significantly different form of debt vs a car loan or mortgage.

For example as a renter I could care less how low prices go for housing since falling housing prices result in lower rents. My cash purchasing power is actually increased as goods bought with debt fail to find buyers.
As long as my job does not depend on people being able to secure large debts or maintain revolving credit lines debt deflation is in general good for me.

Other less direct cases lets say the company I work for has less credit and can't expand assume that they where planning on expanding in china and laying me off. Instead they keep existing facilities and work within their cash flow. Again loss of credit turns out to be a good thing.

Given the overcapacity in the system loss of credit and bankruptcies are a good thing since they strengthen the remaining players. Certainly it leads to high unemployment and eventually falling wages but again this is actually good vs shipping everything overseas. Better work at a competitive wage vs no job at all.

Next of course in the work force at some point companies will have no choice but to work efficiently eventually the smart and good ones will be forced at gunpoint to start listening to their workers and hiring management that understands the business and gets rewarded with real success.

Underlying debt deflation are all the positives of moving to a debt free society. For the typical consumer moving to not use debt the biggest change continues to remain in housing and auto's which are generally purchased with debt once you move past that what you get is a time lag as they save to purchase other items.

At the business level government interference will simply keep consumption high and companies weak but I agree that debt deflation will overwhelm this and eventually force a functional debt free economy.

Peak oil means the amount of free cash declines but its tough to see this is critical until after debt deflation has devalued housing given how much housing takes out of most peoples income. Eventually of course once debt deflation has run its course and businesses are debt free and housing has dropped effectively to zero you reach a point where further increases in oil prices result in shrinking of even this debt free economy.

I'd say at that point economic activity will then finally really move towards areas with lower and lower oil requirements. Localization, organic agriculture etc. Certainly people are then really getting poorer nothing much you can do about it but on the same hand money will increasingly be recycled locally resulting in relocalization of the resulting wealth.

None of this is actually bad and once the consumer gives up on buying houses, cars and using credit cards then the continued death of the credit economy is increasingly decoupled from the real or cash economy. Peak oil simply forces this divorce.

Thus the mistake that the deflationists are making is assuming its impossible to have a robust economy without debt. Its not the only big losers are the housing and automobile industry.

So left alone I thin the economy could readily transition as peak oil forces it to transition if its not left alone it just means more and more oil is being burned for activities that don't contribute to the future and thus eventually simply make the transition all that much harder.

Many economies in the world function quite well without using substantial amounts of effectively unsecured debt.
But that starts complicating matters because the real problem is how well secured debt is not debit itself.
For example pawn shops for the most part lend fairly risk free.

I could clarify and say the destruction of unsecured or undersecured debt becomes quickly irrelevant.
But I suspect regardless of how I explain this the true Monetary deflationists will never recognize that the world really does not revolve around debt deflation.

I agree that the world does not have to revolve around monetary deflation, as long as that same world did not have monetary inflation in the first place.

But we did, by using credit to inflate the money supply. Now, even if we just stopped using credit (via liquidity traps or central bank self-restraint), that means the effective money supply still shrinks by the amount of credit withdrawn, as well as by how much cash has to replace the credit "already spent" (our debt - no more roll overs).

Now either we print the money to "catch up" to what we actually spent, or we default.

Either way that former "credit currency" is gone from the system - the money supply shrinks.

That means less money available for the economy - to pay employees, or buy "things."

That means we compete for the remaining cash with producers dropping prices looking for buyers and employees dropping pay and benefit demands as people compete for jobs. I guess that continues until the past credit (debt) is cleared, then we'll see where the resource-based monetary system equilibrium takes place.

Re. Mish saying we will "slide in and out of recession for a long time" ...

If I remember correctly, Richard Heinberg was asked what peak oil would do to the world economy (in an interview in "The End of Suburbia" I think).

Heinberg replied that (paraphrase) we would have "serial recessions or depressions," as each economic recovery would be stalled by spikes in the price of oil, causing the world to slip back into recession/depression.

I don't see why we won't see a resurgence in local manufacture esp as oil gets expensive.

Huh? I would expect to see a resurgence in local, and indeed all manufacturing if oil gets really cheap. Expensive oil will make manufacturing more expensive for everyone regardless of whether your are local or not.

However there is very little local manufacturing anywhere anymore. Sure there are some local makers of arts and crafts and stuff like that, and a few local canners of stuff like apple butter and such. But who local really makes large scale manufactured goods. Assembly lines produce almost everything today. Assembly lines are not really set up to make local stuff only.

Bottom line, if oil gets really expensive we will see a huge falloff in manufacturing. However it is not as if we are not seeing that already. Manufacturing of just about everything is off about 30% according to Denninger. The recession is getting worse according to him. And I think he is correct.

yet because their income decreases even faster they will be forced to substitute food for oil.

Just to keep it simple I'm saying they cannot substitute food for oil. They need to burn oil to earn money to buy food. The other choice is subsistence farming which is not viable because these people would need both the land and the skills to convert to subsistence farming and even subsistence farming requires and initial investment in some rudimentary tools. You can't simply recreate the third world farming village in a first world nation.

Next its a range of incomes all income levels spend more on oil. The point is the precentage of the GDP spent on oil has no upper bound like food.

Think of it this way consider a modern army fighting a war to wage war it needs a certain amount of oil no matter what. Modern economies never left the WWII war footing they work the same way and have the same inflexible oil requirements. Outright shortages will simply force some activities to cease but barring shortages the demand remains. Only subsistence farming really offers a way out.

It does not matter if the economy is forced to shrink because of absolute declines in oils supply you will still have oil costs taking and ever larger precentage of a shrinking pie.

Now over the near term most of the shrinkage is not in the real economy which uses oil for manufacturing of goods and services but in the FIRE economy or financial economy. The problem is that oil usage for financial firms is low. You can dramatically reduce the banking sector without having a significant impact on overall oil usage. The oil usage of Bank of America is dramatically lower than DOW Chemical for example. The energy requirements to produce a Mercedes are similar to a cheap chevy. Thus you can eliminate Mercedes demand and the excessive profit for luxury items and not reduce oil consumption.

Thus from both the bottom and from the top regardless of approach you can take simple basic economic principals and show as long as the economic engine is based on oil then as oil production declines the precentage of GDP used to purchase oil increases. Eventually yes the oil based economy is simply not viable either we transition to something else say EV's with a similar lifestyle or move to subsistence farming. But as long as you can take oil and create anything or do anything that results in a incremental value add sufficient to buy food you can and will use oil.

As another example mortgage costs as precentage of income have risen substantially over the years and despite the recent bubble popping housing costs are sill a lot higher then they where in the 1950's. Thus housing has taken ever more income to support. And sure the bubble popped but houses are durable goods they are not oil.
In general a overpriced house does not rapidly disappear. If we did not have an absolute oversupply of houses then housing costs would have continued to take ever larger percentages of peoples income. Thus if housing behaved like oil then its obvious that housing would have increased its precentage of income and thus GDP until it was directly competitive with food. I know I keep switching to this but its important because oil vs food and oil for food is the underlying hard limit. Esp oil for food because of the oil for food case oil can and will take more of the GDP.

memmel: I think your analysis is partially right, but there are a couple of things I would quibble with:

First, while I think that in general there will be a trend for oil to command a growing slice of the GDP pie, there will be some push-back, especially as the luxuries and frivolities are squeezed out of the system and we get down to basic necessities. I think it is starting to become obvious that energy consumption in general, and oil consumption in particular, is not quite as inelastic as had been presumed. It is not just a matter of consumers responding to price signals; how much money they have in their pockets matters as well. If people can't afford to pay the higher prices, then they simply must figure out how to make do with less. There is actually a lot more room for cutbacks in consumption than many people realize. If the incentives are strong enough, then people will start carpooling, for example.

Second, with regard to food (and to some extent this can be extended to most other consumer purchases), it is not just a matter or dollars spent and quantities consumed; people do have the flexibility to change their consumption patterns. Thus, people can switch from steaks to ground beef, to chicken, to canned tuna, to dried beans. Similar downscaling patterns can be identified for many other dietary components, and for other goods and services as well. Some things - candy, for example - can simply be cut out of the household budget altogether, and consumers can simply learn to do without. To be sure, people do not always do what it seems obvious that they should do. There are plenty of examples of very poor people eating relatively expensive foodstuffs, when less expensive and more healthy alternatives are available. Nevertheless, the experience of countries under food rationing regimes during WWII suggests that most people will in fact make sensible substitutions when they have to.

Nature vs nurture is a tired old argument. If people would take a course in quantitative genetics they'd understand the interplay of heredity & environment. I've posted the general equation before so it'd be repetitive to do so again but the point is that the contributions of the components are well understood and quantifiable.

Todd, there is nothing new in this article however it is very misleading. There has never been, to my knowledge anyway, a debate between "all nature" verses "all nurture". The debate has always been between the "all nurture" people, that is the behaviorists, the blank slaters, and the other side, people who say it is both nature and nurture. No one in their right mind claims, or has ever claimed, that it is all nature. That is no one has ever claimed that genes are everything and the environment counts for nothing.

The debate is over however. The behaviorists, the Blank Slate folks, that is the all nurture people have clearly lost. The last one with any real influence in the biological world, Stephen Jay Gould, died a few years ago. And the greatest behaviorist of all, B.F. Skinner, died many years ago. The "it's a combination of the two folks" like Pinker, Ridley, Wilson, Dawkins, Smith and all other biologists of note, have clearly won the day.

However it is very stupid to say: Nature? Nurture? UI Scientists Say Neither. Neither? That is pure ignorance. It is both. Neither is an impossibility for genes and environment are all there is.

Of course, you can argue with the proposition that all we are is knobs and turnings, genes and environment. You can insist that there’s something...something MORE. But if you try to visualize the form this something would take, or articulate it clearly, you’ll find the task impossible, for any force that is not in the genes or the environment is outside of physical reality as we perceive it. It’s beyond scientific discourse.
Robert Wright, "The Moral Animal"

I used to read a lot of Gould's essays.He was a brilliant man,but history will soon forget him.The man who will be remembered is EO Wilson,who placed his science above his politics.

And as someone is fond of remarking here,facts are very stubborn things that WILL eventually be recognized for what they are.

Wilson tells it like it is and basically the way it is is thus:

Nature sets the limits and determines the basic behaviors(-I doubt if very many of the blank slaters think they would like to make love to a pig even if strenously trained in piggy love from infancy)and culture determines behavior within these physically limited bounds.The bounds are not exactly rigid but they are very real.

And Gould knew this and admitted this but he kept SAYING things that jibed with the political convictions of the intellectual crowd he ran with.

The last time I checked the list of innate behaviors demonstrated to be universal among all humans took about two pages to list.

I never followed this "debate" among the intellectual titans but I think you have it right that Gould may have been heavily influenced by political convictions - specifically the fear that biological determinism would be used as an excuse for rascism, sexism, etc, etc. and maybe even genocide.

You are dead wrong Sendoil. Stephen Jay Gould was a true blank slater. He wrote the forward to the Blank Slater's bible "Not In Our Genes" By Steven Rose et al. That book claimed that intelligence was a complete blank slate, that everyone is born with the exact same intelligence level and only nurture changes that. Gold wrote in an essay "Nurturing Nature" published in "Natural History" and later in a book of essays called "An Urchin in the Storm". The essay was a defense of the book "Not In Our Genes."

If we thought that biological determinism was pernicious but correct, we would live with it as we cope with the fact of our impending death. We have campaigned vigorously against this doctrine because we regard determinist arguments primarily as bad biology---and only then as devices used to support dubious politics.

Of course no one ever claimed that intelligence was completely determined by the genes, just largely. That is an Einstein and a Forrest Gump were different from birth, that their difference was not largely genetic. This proposition gave Gould and his camp fits, they would have none of it. They insisted, in this book and elsewhere that intelligence was "Not In Our Genes".

Here is an essay by Gould describing his stance against Darwinian fundamentalism. I haven't read the forward you mentioned but so far in my reading I found Gould to be somewhat balanced. I have never read anything about these debates before so I am coming in with a blank slate myself. The only bias in my approach to the subject would be my experiences in life so in this specific example evolutionary psychology does little to explain what I may come to believe.

I'll defer to you on this one Ron, since as I said to farmerMac above, I did not bother following this debate among the intellectual giants.

I read a lot of Goulds work when I was young and I tend to agree with Mac and goghgoner, that Gould seemed to have an intelligent and balanced opinion on this subject. But he may have gone to the "blank slate" extreme due to his fears of the political ramifications of strict biological determinism.

In support of your contention that Gould was a "blank slater," I did find this quote, attributed to Gould, which makes me think you are more correct than not:

The “brain [is] capable of a full range of behaviors and predisposed to none.”

I'm not sure of the context of the quote, but it sound like complete nonsense to me.

So I'll retract my defense of Gould on this subject - I'm too ignorant of the details of his position to make a well informed decision.

I guess I must have missed all the stuff Gould did in defense of the blank slate theory but I never read him extensively-never SOUGHT OUT his work,because at the time I got into that stuff,it was already blindingly obvious to to me that the blank slate was/is just plain fundamentalist bullshit.

There is now and never has been any evidence of the physical sort that we are anything but the latest model ape at the end of our branch of the evolutionary tree.

I suppose this does not POSITIVELY prove that our brains have not taken a giant leap and freed us from our evolutionary heritage,but if so,it is the only known case in all of biology of such a thing happening.Occams razor says that the simpler explaination ....

But I stiil think I remember reading something he said or wrote that indicated to me that he was an intellectual prostitute-in a good cause,but nevertheless a prostitute selling WHAT HE KNEW TO BE THE TRUTH short for political ends.

The only other explaination that can stand examination is that he was a professional quack,an intellectual pygmy.His work in other respects disproves this possibility.He was maybe not a genius,but he was no certainly pretty smart.

The blank slate stands in direct contradiction to the entire edifice of scientific biology. If you understand evolution ,then the only way you can believe in the blank slate is to be suffering from a world class case of cognitive dissonance,or maybe you can dismiss evolution and go back to the priests and story tellers explainations of our origins.

Incidentally Gould if I remember correctly was a big advocate of punctuated equilibrium,picturing it as a MAJOR revision of Darwin-which it is not.But he got a lot of publicity out of it-and the fundamentalists of the religious sort got a lot of mileage out of HIM as a result.

Nonsense! A specific gene for a specific behavior has nothing to do with this debate. No one in their right mind clams that that there is a specific gene for a specific behavior. But that is another debate entirely.

What is wrong here is that Gould is saying that biological determinism means a specific gene for a specific behavior. This is nonsense, stupid! It does not. And there is no such thing as biological determinism. What Dawkins, Wilson and others are saying is that there are some people that are more intelligent than others and that this characteristic is genetic. That is all! To deny this is ignorance pure and simple.

I find it truly surreal to read academics denying the existence of intelligence. Academics are OBSESSED with intelligence. They discuss it endlessly in considering student admissions, in hiring faculty and staff, and especially in their gossip about one another. Nor can citizens or policymakers ignore the concept, regardless of their politics. People who say that IQ is meaningless will quickly invoke it when the discussing turns executing a murderer with an IQ of 64, removing lead paint that lowers a child’s IQ by five points, or the presidential qualifications of George W. Bush. In any case, there is now ample evidence that intelligence is a stable property of an individual, that it can be linked to features of the brain (including overall size, amount of gray matter in the frontal lobes, speed of neural conduction, and metabolism of cerebral glucose), that it is partly heritable among individuals, and that it predicts some of the variation in life outcomes such as income and social status.
Steven Pinker, “The Blank Slate” pages 149-150

CalPERS expected to report losing nearly one-quarter of investment portfolio
The estimated $56.8-billion drop at the U.S.' largest pension fund, the second annual loss in a row, would have a huge effect on what state and local governments must shell out to support retirees.

A fair chunk of the USA economy is like this-CALPERS could literally have paid a 4th grade student to run the fund and acheived similar or better results-there isn't any wealth being created in the vast majority of the economy-it is all Madoff type scams.

"Today, filmmaker Josh Fox, Earth Justice Senior Attorney Deborah Goldberg, Sabrina Artel, Host and Producer of Trailertalk, and Natural Resources Defense Council Attorney Kate Sinding on why hydraulic fracturing poses a real threat to water supplies in the United States and the New York city watershed in particular."

The author is right that personal lifestyle changes in and of themselves do not make enough impact to really make a significant difference. However, the author fails to recognize that there are such things as cultural revolutions, and that the significant political and economic changes that he is looking for and that are needed are actually more likely to come about as a consequence of sweeping cultural changes in a society, rather than by the political harping of a noisy minority faction.

For example, the 19th century US abolitionists never made much headway through their political agitation. However, they did gradually change attitudes in the north, especially with the publication of Uncle Tom's Cabin and other purely cultural actions. It was the perception amongst southerners that northern attitudes had changed that led them to feel increasingly defensive about their "peculiar institution", and thus eventually precipitated the events that led to civil war and emancipation. I very much doubt that the civil war and emancipation would have happened without this prior cultural revolution in the north; instead, politicians from both sections would just continue to compromise and muddle through, as they had for decades previously. The US might very well have entered the 20th century with slavery still existing in some places.

Of course, emancipation did not lead immediately to full equality, which leads to our next example. The received truth, especially amongst African-Americans, is that they won their equality by forcing the issue through political action. That is only part of the story though. Were it not for the fact that they chose to act at just the same time that most households had acquired televisions, and most networks were developing the capacity to broadcast national news programs, I am doubtful that so many attitudes amongst so many of the white majority would change as quickly as they did. Reading newspaper stories about a mob being broken up and dispersed would imply one thing; seeing the fire hoses and police dogs turned on unarmed civilians implies something quite different. The civil rights struggle was a much a cultural revolution as it was a political movement, and IMHO would not have been successful as a political movement had it not also been a cultural revolution.

There is also the example of "women's lib". As a political movement, it was not totally sucessful; the ERA did not get ratified, after all. However, feminism was only secondarilly a political movement, and was primarilly a cultural revolution. Those of you who are only in your 20s or early 30s have no idea how different the US is today for women compared to how it used to be.

Need I mention Vietnam and the peace movement? Those of you who were not born until the 1960s or later have no idea what the US was like in the 1950s or early 60s. Cold war, anti-communist McCarthyism was pretty much the dominant cultural paradigm, and the US was extremely militaristic. It is hard to believe, but the vast majority of the American people were all in favor of our barging into Vietnam; most people were wondering what was taking our government so long about getting on with it. The numbers of people opposed to the Vietnam war at first were a tiny, tiny minority, barely even visible. Note that the political efforts of the anti-war movement yielded very little success, either, for a very long time. It was mostly as a cultural movement that they succeeded in changing minds, one person at a time. Eventually, they even managed to change the mind of someone like Cronkite; as LBJ recognized, when he had "lost Cronkite, he had lost middle America." Ultimately, most people were turned against the war, and it was only then that Nixon was under enough political pressure that Kissinger was finally forced to bend enough in negotiations to secure a peace treaty adequate enough to cover a pull out.

Yes, we do need to secure some huge political changes. However, we need to lay the groundwork first, and that requires achieving a massive change in people's attitudes and ways of thinking: a cultural revolution.

The thing about a cultural revolution is that there is no one way to make them happen. They tend to be multi-pronged efforts, and those efforts tend to be mainly grass roots affairs. It is the growing numbers of people - or the perception that there are growing numbers of people, perception being just as good as reality - that are seen to have changed their minds in a way that makes a difference, that in turn causes still more people to re-examine their present way of thinking, and to possibly change it. Cultural revolutions are chain reactions, starting with a few and snowballing until their influence has been felt through most of society.

And this brings us right back to those personal lifestyle changes that were so denigrated by Jensen in his article. I would argue that personal lifestyle changes can matter greatly, but for different reasons than Jensen imagined. Personal lifestyle changes matter mainly because they are a way to lead by example. When the majority's thoughts are governed by the dominant paradigm, they are led to think that a different way of life is "impossible". When they are confronted by people actually living the so-called impossible way of life, then they are forced to question their assumptions. If those living an alternative life style are not only succeeding at it, but actually are more or less happy with their life, then that forces further questioning of assumptions. This is the raw material at the grass roots from which cultural revolutions really take off and multiply.

I have to substantially agree with this analysis. It is important to realize that the energy consumed by industry, ag, etc. (the other 75%) can implicitly be assigned to individuals equally if we let it happen.

Realization that we tacitly allow the energy to flow as it does is the first step in preventing it. While you can never get a corporation to look beyond profit or a government to wield less power, there is at least a hope that individuals are another matter. Go Gandhi.

What I truly dislike about these types of articles is that they allow one to absolve him or herself from the problem. "Oh, but I just use a tiny fraction of that water" [some 400+ gallons per day if you happen to live in Palm Springs], "so my use doesn't count". Or, "why should I cut back on my electricity consumption when all those big factories and office buildings use so much more."

I agree, but one point of the article is that one also cannot absolve oneself by merely saying that "I recycle and drive a Prius." Political and cultural action is also necessary.

I would like to think that those who bother to change their lifestyles will also be outraged if they see other major segments of industry and government fail to change in similar ways and will put pressure on these segments to change.

Most people I know that are doing one are also doing the other, both political and personal changes, but of course never nearly enough.

I hear ya, but I suspect most readers(*) are likely to conclude they're largely powerless to change anything outside their own personal sphere and, in the process, the author has diminished the value of what they can and are willing to do by, in effect, saying it's irrelevant.

Think of our consumption as murder; each kwh or gallon of gas or other resource we consume is just killing more of the planet, denying some additional being its existence. If someone kills someone or tortures an animal, most of us don't just say, "well he just did a little killing" or "he's just a little part of the overall murder problem" or "look at how may people Hitler killed". Consumption needs to be seen, ultimately, as an ethical issue and we need to act accordingly.

Maybe the point of this kind of article is that most of our consumption is second order consumption. The fact that we use roads is one piece of our environmental impact. The fact that we are using electricity (and hence water to make electricity) is another piece. The fact that we use a local mall has an impact, as does the fact that we buy food from a restaurant or a grocery store.

It is hard to make the second order impacts go away, without the businesses going away. If we reduce our electric use, each customer will likely have to pay more, since fixed costs didn't go down. It is not clear to me whether water use will go down proportionally--(I don't know).

The big purchasers of goods and services are high income people. I suppose a fix would be to start capping people's incomes. I don't expect there will be big demand for that, however.

Excellent point. We contribute to the consumption by The Machine everytime we participate in our culture/society in even the smallest of ways.

About capping incomes of the high income purchasers of goods and services - we should begin by getting rid of 70% of the finance sector of the economy. Most, but not all, of the people in finance are little more than grossly overpaid parasites who do little if any good for their pay.

"A severe weekend storm in the Edmonton, Alberta, area knocked out power to two of the region's three major refineries, worsening an already-tight gasoline supply situation, industry officials said on Tuesday.."http://www.bnn.ca/news/10909.html

MOSCOW -- Russia's OAO Gazprom said Tuesday it may delay development of the giant Shtokman gas-condensate field if demand for gas remains depressed.

The state-controlled company said last month it would postpone the launch of another major field, Bovanenkovo, on the remote Yamal peninsula, as the global recession cuts demand for its natural gas in Russia and Europe.

NATO's core mandate of guaranteeing the common security of member states will never change, according to Scheffer. But he said the organization should also continue to focus on a new "strategic concept" which takes into account an increasingly diverse range of potential security threats.

"You cannot deny that the melting of the polar cap, the ice cap on the North Pole is having a lot of security consequences," he said. "You cannot deny that where you needed a tank division at the frontier of a nation only 25-30 years ago, it's now a gas lever which you close. Or it's a cyber attack, where you can totally paralyze a nation.

"I'm not saying that NATO is by definition in the energy business, we're not. Is NATO in the climate change business? No we're not. But those new challenges can have security implications. NATO cannot stay away from at least discussing the security implications and try to define the added value."

In any case in charts published a few years ago these fields were shown as coming online about now in order to counter older field depletion. The late Bakhtiari claimed it would be technically impossible for Gazprom to manage both these projects at once in that timescale and predicted about 2015 before gas started flowing in any quantity from the Yamal peninsula and closer to 2020 for Shtokman. Without these fields online global gas supply will peak about now he claimed.

This may be a convenient recession for Gazprom...

As well as the NATO comment, it also seems that the European Union is becoming more and more concerned and seeking further powers over gas companies (and possibly even over national governments) etc to improve European gas security. I'm not sure how well it would go down in a member country if it was ordered to export gas to others if there wasn't sufficient for use at home...

Poor dear NATO, it is "threatened" by Russian gas. Please take your xenophobic circus and shop elsewhere. NATO drones should listen to the drivel they spew sometimes, comparing gas supplies to tank divisions is the height of inanity.

It is funny to see all the big efforts around Nabucco as if a pipeline is a source of gas. The only way Nabucco can eliminate dependence on Russian gas is if Iran shipped every last bit of gas it produces to the EU. But Iran, the country with the second largest reserves in the world, actually imports from Turkmenistan. Turkmenistan can't produce enough gas to replace Russian supplies to the EU, especially since it ships over 40 billion cubic meters per year to Ukraine. Azerbaijan, Kazakhastan and Uzbekistan are not even a third of Turkmenistan.

All the hate directed at Russia is going to leave the pompous, braindead EU leaders with LNG from Qatar as their only source of gas. The delay of Shtokman is not about Russian ability to develop gas fields, but about NATO's imperial ambitions.

Please take your xenophobic circus and shop elsewhere. NATO drones should listen to the drivel they spew sometimes, comparing gas supplies to tank divisions is the height of inanity.

Dissident,

Please note I only posted what was said. I haven't actually agreed with virtually any of NATO policy for a long time.

In fact I'd sack the NATO Secretary General right now for such a remark which comes perilously close to accusing Russia of waging actual war against the EU. People can think what they want but for the head of NATO to actually say that is just plain stupid. Almost sounds like an invitation to play a game of "Chicken"... And supposedly the US and Russia have pressed the "reset" button. As I said, if it wasn't authorised I'd sack him. If it was then God help us.

The delay of Shtokman is not about Russian ability to develop gas fields, but about NATO's imperial ambitions.

So you are suggesting that Russia is deliberately delaying Shtokman due to "NATO's imperial ambitions" then?

All the hate directed at Russia is going to leave the pompous, braindead EU leaders with LNG from Qatar as their only source of gas

Then a nice quick nuclear exchange if it all goes as badly wrong as you expect? Or do you expect the "braindead" EU and the rest of the "West" (NATO: No Gas = Tank Invasion) to go quietly into the night?

Regarding Shtokman, what is the point of rushing this field into production if the EU is trying to reduce dependence on Russian gas. Russia produces more gas than it needs already, when production declines between 2020 and 2030 that is when the field should be brought online and not by 2015.

NATO is the imperial wannabe outfit that is trying to encircle Russia with bases, basically acting as if the cold war never ended and Russia=USSR. Russia has been playing nice with NATO for almost 20 years and this has only emboldened NATO expansionism. So if there is a "reset" it will reflect the change in mood of Russian domestic politics.

Note to self: When trying to improve ties with a former Cold War-era foe, check a dictionary.

Secretary of State Hillary Clinton learned that lesson the hard way Friday when she presented Russian Foreign Minister Sergei Lavrov with a gift bearing an incorrect translation -- one that implied hostility, rather than peacemaking.

Regarding Shtokman, what is the point of rushing this field into production if the EU is trying to reduce dependence on Russian gas.

And now we're getting "circular".

The EU says it wants to reduce dependency on Russian gas because it is worried about reliability of future supplies ==> Russia says it is reducing present and future production because the EU doesn't want its gas ==> The EU says it wants to reduce dependency on Russian gas because it is worried about reliability of future supplies ==> Russia says it is reducing present and future production because the EU doesn't want its gas ==>...

Truly the internment,a polite word for imprisonment, of the Japanese community during WW2 is a very black mark on our record, but we were engaged in a hot war at the time and they were freed alive if not made whole.

Upon learning about Hitler copying America’s policies of genocide, I immediately wondered if this is why I could never locate a copy of Hitler’s Mein Kampf that was not abridged. An empire would not want a book with such explosive history in its libraries.

"You must drive all the natives of the land before you. If you do not drive the natives of the country before you then those who remain will become disgusting to your eyes and a thorn in your side. They will harass you in the land where you live, and I will deal with you as I meant to deal with them."

Num. 33:51

And lets not forget:

"The land you are invading is foul because of the filthiness of the natives. Their land is filled with filth from end to end because of the foulness of the natives. So you must not marry them or be concerned with their prosperity, so that yourselves may grow strong and eat the best of what the country produces yourself, and leave it as an inheritance to your sons forever.'"

Ezra 9:10

Or how about:

"Put the inhabitants to the slaughter without giving any quarter and burn their town down. In this way the lord might turn from his fierce anger and show you compassion."

of course the nazis, stalinists and maoists killed millions, and the stalinists and maoists even killed millions of their own people.

likewise, the americans killed 10,000,000 natives, 700,000 of its own people in a civil war, about a million? civilans by firebombing and nuking cities in wwii, killed 3,000,000 mostly civilians in vietnam, and 1,000,000 mostly civilians in iraq.

for every one of these acts, you can spin a justification for it, or claim that it's an "isolated incident," but then again, so did the nazis, stalinists, and maoists!

at a japanese war museum last year, i read a display (in japanese) that said - japanese troops went to china in wwii because china's local governments called on japan for assistance to put down rebels and terrorists. sound familiar?

the TV and the internet and most people are spellbound by, and actively maintain, a WALL OF SPIN about how everything "we" do is good, and everything "they" do is bad. this is a form of social control. every country has one. i have no interest in adding to it.

i can't simultaneously believe the japanese story of wwii and the american one, because they're mutually contradictory. then there's the nazi story and the stalinist story and the maoist story. each is the same, in that everything "we" did was moral, and everything "they" did was wrong. the only difference is the identity of "we" and "they."

these morality stories don't help people to understand reality. they are a massive wall of noise, meant to confuse and disable people. to participate in them is to forfeit understanding how things work in the real world.

You highlight my point about NATO's xenophobia. Everything on this planet is a threat to you and whatever you do has the blessing of the angels. Unlike the Nazis and the Commies you have NO REAL THREAT TODAY. So your imperial adventures in Afghanistan and Iraq and attempts to establish bases around Russia are not evidence of "defence of the peace". Orwell's vision applies quite well to the totalitarian chorus western media today. Have any WMD's been found in Iraq yet? How about the murder of protesters by the Honduran coup junta, why are they less important than those in Iran?

I believe everybody here has made his point or points.And done a good job of it too.

OF COURSE we go to war often and for selfish reasons as societies,cultures,and AS A SPECICES ENGAGED IN INTRA SPECIFIC COMPETITION.

And of course the leaders in every case do ,must do, whatever they can to whip up the masses,and fan the flames in order that "us" is ready and eager to kill or enslave "them".

It's the way we are made,it's the way the chimps, and the lions, and the wolves do it too.

We are just better at it.

I've read Mien Kampf,along with Solzhenitsyn,and Bury My Heart At Wounded Knee.And the KJB several times thru. And all the antiutopian novels I ever heard of.

Plus one hell of a lot of history.As a matter of fact I have spent most of my life on a random walk thru the worlds library.

Nobody has the foggiest idea how to change our nature,and if it were possible to do so,we wouldn't be the same creatures we are now anyway.

But if somebody comes up with a way tomorrow to make every body love every body else,I am going to be among the first on the bandwagon.

But to pretend that there is no such thing as historical context when for instance judging somebody like Thomas Jefferson is nothing short of intellectual bullshit.

And while there are many many things I detest about our society,any one who will take an honest look at our historical record will come to the conclusion that it is no worse than that of any other large and powerful country,overall,and far better than most.This judging from the secular humanist pov.

Genghis Khan,Napoleon,Hitler,or the Romans would have laughed at us for failing to take advantage of our opportunities to consolidate our power.

My Scotts/ Irish ancestors were driven from thier homes by dint of English arms for the most part.

We killed of most of Airdales ancestors before we even knew they existed ,unintentionally via smallpox,but later smallpox was used deliberately at least once.We were not kind to the survivors,to put it mildly.

Someday somebody with everything to gain and nothing to lose will take this land away from us.

And pretending that every body will be nice if only we will be nice first will most likely speed up the process,if the be "nice" faction succeeds in disarming us.

This is not to say that treaties and inspections and so forth are not good things.THEY ARE VERY GOOD THINGS,and so is trade that makes war less likely-which can be the case when both trading partners stand to lose from a war.The olive branch is a very good thing.

But so is the sword when you need it.

And insofar as to why the Germans were treated better than the Japanese during WW2:most of them had been here already for at least three or four generations-long enough to be rtecognized as "us".And it did not hurt that they LOOKED like "us" either.

The Japanese were newcomers and still living in a more or less segregated society -segregated in relation to the Japanese( as well as the blacks or African Americans or people of color or whatever term is in current use this semester.)

The first Mexicans that have moved into this nieghborhood are still "Mexicans" but thier kids are beginning to date our kids and fifty years from now they will just be the "so and so family down the street"- cousins and inlaws and grandparents if we are lucky.In this one respect I believe our luck will hold.

I'd recommend building a library of how-to and DIY books. First, it can be very awkward and inconvenient to try to work on something while looking at a computer screen. Second, we can't be sure how much of the web is going to stay up long term. It might not all come crashing down any time soon; on the other hand, nobody has come up with a good business plan for delivery of free content in a declining economy, either.

Here are a few to try .. and I fully encourage you to type the nouns from your question into a search engine like Google and just explore.. referrals can be great, but chance discoveries are like free candy!

BAGHDAD — Iraq's water resources ministry on Monday called for talks with neighbouring Turkey and Syria after the flow of water in the Euphrates river fell by more than half in less than a month.

The ministry is aiming for "an urgent meeting with ministers and experts from the three countries concerned this coming August to discuss the sharing of water and the fluctuation of flows to Iraq," a statement said.

The Euphrates's flow "in the Hassaiba region (near the Iraq-Syria border) is very low," it said.
"For 10 days, it has been 250 cubic metres per second (m3/s) and these quantities are not sufficient for agriculture and other needs."

Suncor Energy Inc. and Petro-Canada will sell 104 gas stations in Ontario and some terminal storage and distribution capacity under an agreement reached with Canada's Competition Bureau, which will allow the merger of the two companies to go forward.

Why are they expecting electricity use to grow? Sounds like a BAU projection, which is still the most common type. They are all, in my view, mostly worthless. Similar to the air travel and car growth projections of a few years ago.

"The second thing, which drives the importance to the Chinese, is their own view that the industry is running short of natural resources and so it would be a good long-term investment, in and of itself." (from article on TOD on Chinese investment in Canadian oil)

China is galavanting all over this planet securing oil sources wherever they can, providing a clear indication of their complete understanding of peak oil, while the US took a different tack and pre-emptively, with zero provacation, invaded Iraq for its oil, apparently only interested in securing oil reserves by way of force. What if instead of waging war, we had spent that trillion plus dollars doing exactly what the chinese are doing? Wouldn't that have been more peak oil savvy?

I think he's saying that China doesn't understand that Canada, under NAFTA, is obligated to sell the U.S. nat gas and oil. In other words, Canada can't simply divert oil from the U.S. to China because it wants to, unless it wants to risk the wrath of the U.S. Empire.

Stepping on the gas, in record amountsWhile U.S. gasoline sales have slumped, Canadian consumption has soared to a new high

Thanks to his Ford Ranger, house painter Richard Gouveia has kept on trucking through the recession, relying on his pickup to get to work from his Toronto-area home and to haul gear from one job to another.

After a slump in business last year, Mr. Gouveia said he's now driving as much as he ever has.

Like many other Canadians, he hasn't cut back on the gas he uses, despite the recession, and in stark contrast to Americans who have changed their driving habits.

I have seen many discussions about the price of oil. In this thread, in fact, some predict that price will go up slowly. Others (emmel) have said that price is set to spike.

My question is this . . .

How on earth can anybody make any prediction with any confidence when the information about the key producers - specifically the KSA - is, at best, muddy?

2 Extremes . . .

If the KSA has been deceitful about their capacity, and they were barely holding on to production during the run up of summer 08, and new projects are overblown in terms of production potential, and Ghawar is depleting faster than outsiders believe - then aren't we on the verge of a price spike?

or

If the KSA has been completely honest - or maybe even conservative - in their depiction of capacity and future projects, and they really can bring 4MBD to market over a short period - then aren't we going to see prices fairly flat for several years?

I've read all the posts - the google map images of ghawar, the MS book, and so on.

The evidence seems to allow a very wide range of predictions.

The only thing I can think of that might sway me in one direction or the other is my understanding of human nature.

That is - I can think of 100 viable reasons why the KSA would lie through their teeth and exaggerate the current capacity and future projects. I can't think of any plausible reason that they would underestimate. So I view the extremes as - current KSA estimates - the absolute maximum we could hope for. The worst? I'm frightened to note that it could be substantially worse than the KSA estimates.

What we have observed, based on EIA data, is a -1%/year decline rate in total liquids production in KSA, but a -2.7%/year decline rate in net oil exports (2008 versus 2005). Average annual US oil prices increased from $57 to $100 over this time frame, a +19%/year rate of increase.

This pattern of lower oil production in response to higher oil prices is what we also saw when the prior swing producer, Texas, peaked in 1972.

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